a lot of the linking tequniues that used to rank websites are no longer working, there are a shed load of arguments online at the moment as whether Google has actually dished out penalties over these or simple devalued the links so that they no longer push your site up in the rankings, personally I think it is a little more complicated than that.
But basicaly you need to take another look at the quality of the information on your website, are you describing the kind of products you are selling and do you have good detailed descriptions of the products that are unique to your website. (You mustnt cut and paste your descriptions from other websites as this will get you penalised...)
You now need a balance of good quality links to your website, and good quality unique text on your website to rank well.
This is exactly right.
You need a good balance of both on-site and off-site optimisation to rank well now.
Obviously one or other of these (if not both) need attention.